Valeura Energy signs farm out agreement with Statoil for Banarli licences in Turkey

Valeura Energy’s wholly-owned subsidiary Corporate Resources has signed an agreement with Statoil for a farm out on Banarli licences in Turkey.

The agreement is for the exploration of the deeper formations below 2,500m, where over-pressure is expected on Valeura’s two wholly-owned and operated Banarli exploration licences in the Thrace Basin.

The licences cover an area of 540km² near the centre of the basin.

Under the terms, Statoil needs to invest in an exploration programme to earn 50% in the deep formations on the licences.

The programme includes payments and carried costs of at least $36m for Statoil.

Valeura will operate the deep exploration programme during the earning phase and plans to retain a 100% interest in the shallow formations in the Banarli licences.

Valeura Energy president and CEO Jim McFarland said: "Partnering with a global leader like Statoil validates the potential of our assets and the progress we have made to understand the basin and to develop its tight gas resources.

"By virtue of our retained 100% interest in the shallow formations under the agreement, our planned shallow gas drilling programme on the Banarli licences is expected to proceed as planned."

The agreement is subject to the approval of the General Directorate of Petroleum Affairs (GDPA) of the Republic of Turkey for the associated licence interest transfers.

Under the phase one commitment, Statoil will pay $6m to Valeura as a contribution to back costs incurred on the licences upon the approval by the GDPA for the transfer of a 50% interest in the licences to Statoil.

Valeura will also seek GDPA approval to register its 100% interest in the shallow formations.

Statoil will pay $10m for the phase one commitment directed to the drilling, evaluating, completing, fracing and testing of a phase one well.

The company will pay $10m for the phase two commitment to acquire 3D seismic over the licences, in case it opts to proceed to phase two.

For the phase three commitment, Statoil will have to pay $10m for drilling a phase three well based on the same parameters as the phase one well.